Friday, June 2, 2017

Compulsory ADR of Provider-Insurer Fee Disputes in Florida: How Do You Like Me Now?

Alternative Dispute Resolution (ADR) is one of those efficient-sounding, indisputable ideas that no one could argue against – until you are the one being forced to exchange what you thought were clear statutory rights determinable in a public form for ADR.

This concept is squarely at the center of a dispute between the Florida Society of Ambulatory Surgical Centers, two affiliates of the HCA hospital chain (Oak Hill Hospital and Parallon Business Performance Group), Automated HealthCare Solutions (a firm that submits claims to insurers after doctors dispense medications to injured workers) and the Florida Division of Workers' Compensation. The Division has apparently implemented rules which, among other things, would defer resolution of fee disputes between workers’ compensation medical providers and insurers who have a “managed care arrangement” to a private grievance process. But, say the impacted regulatees, “the Agency’s failure to resolve such disputes will force Petitioners to incur substantial additional time, effort and expense to fully resolve them and collect amounts owed.” Yes – that is the point of ADR. 

Why, you might ask, does the Division not want to resolve the disputes? According to Automated Healthcare Solutions’ petition administratively contesting the Division’s rule, at least part of the reason claimed by the Division is that “it cannot decide disputes regarding compensability and medical necessity because [it] lacks sufficient personnel or expertise to address those issues, [it] has the authority and the duty to acquire the personnel and expertise it needs to implement the workers compensation statutory scheme, including the reimbursement dispute resolution process.”

While there are also some interesting jurisdictional (where, precisely, within the administrative structure is the locus of authority with respect to promulgation of such rules) and administrative law (is the agency’s rule generally within the scope of its statutory authority, and who gets to answer the question?) questions at play, it is clear that agency resource preservation has much to do with the brewing dispute. The relevant Florida statutory language (at Title 31, Ch. 440.134(15)(a)) states:

A workers’ compensation managed care arrangement must have and use procedures for hearing complaints and resolving written grievances from injured workers and health care providers. The procedures must be aimed at mutual agreement for settlement and may include arbitration procedures. Procedures provided herein are in addition to other procedures contained in this chapter.

The question is whether the use of a grievance process must be resorted to as a condition precedent to invoking “statutory” fee dispute mechanisms. The agency seems to be saying it does not have the manpower or technical knowledge to resolve such disputes, so it wants the disputing parties themselves to resolve them. Can the agency do that?

There is, as it turns out, an analogous administrative model of which I am aware. For decades, the National Labor Relations Board has compelled employers and unions (and sometimes others) alleging a violation of the National Labor Relations Act (NLRA) to resort to the private grievance-arbitration machinery of collective bargaining agreements before invoking statutory procedures. An award resulting from a “regular” arbitration has historically been nearly automatically upheld. Nowhere in the NLRA is such a procedure authorized. While I do not like the approach—and the procedures have been somewhat modified in recent years—it is hardly a novel development for an administrative agency to compel utilization of ADR prior to “firing up the engines” of the State. My sense is that those arguing this kind of compulsory ADR exceeds the scope of the agency’s authority will have a steep hill to climb in disputing that such a model is not within the inherent powers of an administrative agency. On the other hand, Title 31, Ch. 440.13(7)(c) states, “Within 120 days after receipt of all documentation, the department must provide to the petitioner, the carrier, and the affected parties a written determination of whether the carrier properly adjusted or disallowed payment.” But I suppose a written determination might be that the “department” has decided to defer resolution to the parties’ private arrangement, and could primarily serve to protect the parties’ timely filings.

I should mention that the NLRA model presumes the existence of a valid collective bargaining agreement. By analogy, a “managed care arrangement” should perhaps be evidenced by explicit, written terms so as to justify the implementation of 440.134(15)(a).

I am not a fan of compulsory ADR, but I do find it ironic that those who support the idea in many contexts may sing a different tune when their own statutory interests or right to a public remedy and forum are threatened. An administrative hearing on the matter will be held on June 23.

Michael C. Duff

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At the end, it comes down to whether 1% dictate everything in country/planet.

Posted by: Paul H. Benoist | Jun 3, 2017 7:43:43 AM

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